Poletown's Revenge

(Note: This was the lead editorial in The Wall Street Journal on August 3 2004)

It must come as cold comfort to the citizens of Poletown, who back in 1981 had their homes taken away from them by the city of Detroit and bulldozed for a car factory. But the Michigan Supreme Court has finally stated the obvious: What's good for General Motors wasn't so good for the people -- and it sure didn't justify violating their "sacrosanct" Constitutional property rights.

Though Friday's decision comes nearly a quarter-century after an earlier Michigan Supreme Court cleared the way for Detroit to condemn the homes, churches, schools and hospitals of Poletown on behalf of a Cadillac plant, it's hard to overstate the significance of this reversal. By expanding the justifications for eminent domain seizures to include "economic development," the earlier decision not only ushered in the destruction of a neighborhood. It set a woeful precedent that continues to embolden unseemly coalitions of private developers and tax-hungry municipalities using government powers to take other people's land.

Friday's decision was unanimous. The lead opinion put it this way: "Poletown's 'economic benefit' rationale would validate practically any exercise of the power of eminent domain on behalf of a private entity. After all, if one's ownership of private property is forever subject to the government's determination that another private party would put one's land to better use, then the ownership of real property is perpetually threatened by the expansion plans of any large discount retailer, 'megastore,' or the like."

Exactly. Remember, we're not talking about a public highway or bridge. To the contrary, today we have governments taking land from Peter because they'd rather Paul have it. In the Michigan case, Wayne County was fighting to condemn the property of a handful of owners after they refused to sell land the county wanted to use for a business and technology park.

In one sense you can hardly blame the planners. Once the Poletown case shifted the test from "public use" to "public benefit," it put any limits on eminent domain on a slippery slope. State and local governments all across America have been happily sliding down it ever since -- and citing Poletown as their justification. The Institute for Justice reckons that between 1998 and 2002 some 10,000 private properties were either taken by or threatened with eminent domain on behalf of other private parties.

In Mississippi, the state legislature tried to use eminent domain to take private land belonging to an African-American family and hand it over to a Nissan plant. In Ohio, the town of Norwood has declared some private homes "blighted" so they can get a new mall. In Arizona, one town invoked eminent domain when it tried to replace a brake shop with a hardware store. In the New Jersey shore town of Long Branch, the city is trying to take oceanfront homes from the present homeowners and build expensive new condos for yuppies.

On it goes, to the point where the "economic development" argument has essentially vitiated what the Founders intended by putting property rights in the Constitution in the first place: to prevent the rich and powerful from manipulating the law to take property from those less well connected. The good news is that this latest Michigan ruling should force a major rethink. We have in mind Connecticut, whose high court now finds itself in something of a pickle as a result of the Michigan ruling.Earlier this year, the Connecticut Supreme Court, in a controversial 4-3 ruling, upheld a bid by the city of New London to seize some perfectly fine waterfront homes and replace them with an office building -- and of course invoked Poletown to do it. The Poletown decision, the majority opinion declared, illustrates "amply how the use of eminent domain for a development project that benefits a private entity nevertheless can rise to the level of a constitutionally valid public benefit."

Actually, what it really illustrates is that a little fudge in language and definition can lead to gross violations of fundamental Constitutional protections. Right now the U.S. Supreme Court is deciding whether to hear the New London appeal. What better opportunity to remind greedy governments what an earlier U.S. court once called eminent domain: "the despotic power."

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Wall Stret Journal